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Same scenario, different reason why Wilkes-Barre delaying payment of bills, says George

Times Leader (Wilkes-Barre, PA)

Nov. 23--WILKES-BARRE -- It was a big deal last year when former Mayor Tom Leighton made an agreement to delay payment of the city's health insurance bills when money was tight.

It's a different story this year for Mayor Tony George. He's done the same thing, signing a memorandum of understanding to pay outstanding Highmark bills by January.

George Tuesday declined to provide a copy of the agreement and distinguished between the two administrations.

"I never said everything's perfect," George said.

Since taking office in January and not getting permission from city council to amend Leighton's $51.5 million balanced budget, George has warned the budget contained unrealistic revenue projections and an impending cash crunch. George proposed a $47.9 million balanced budget that includes a 30-mill property tax hike for next year to make up for revenue shortfalls.

"I made a big deal because he said he was sound," George said.

In December 2015, George was mayor-elect and reviewing the city's finances in his preparation to take over for Leighton who was about to leave office after serving three terms. George issued a press release stating he uncovered a "secret side deal" Leighton made with Blue Cross of Northeastern Pennsylvania without permission of city council to extend the time period to pay $856,000 owed for employee health insurance coverage. The deal showed there was no surplus as George said Leighton asserted and, instead, was evidence the city was "running on fumes."

With most of the revenue collected for the year, the city's in financial straits in the fourth quarter. George acknowledged it makes sense to work out agreements to delay payments until the rest of the money comes in. The most recent monthly financial report for October showed a negative balance.

"There's no way we're going to do it without their help," he said of Highmark, which took over Blue Cross last year.

Highmark did not respond to a request for comment.

Sounding much like he did last year when he responded to George's criticism, Leighton blasted the mayor.

"The man does not understand government accounting," Leighton said.

Not all of the money owed to the city comes in by the end of the calendar year that coincides with the budget year. Revenues for this year will come in next year. Vendors have different due dates for payment and they get paid accordingly, Leighton explained.

The Blue Cross bills were paid before the end of 2015, Leighton said and the city lived up to the terms of the agreement with the insurance provider.

"They gave us that window. We were never delinquent," he said, adding for that reason city council did not have to be notified. "We were not overdue."

Leighton said he left office with approximately $50,000 in unpaid bills and defended his budget against George's criticism that it contained "phantom numbers." The revenues are there to be collected, and George's administration dropped the ball.

"He's lacking leadership in his administration," Leighton said.

If there was any indication the city's finances were in bad shape before he left office, Leighton said it would have been picked up by Standard & Poor's Rating Services. The company maintained the city's A- credit rating in December, but it revised the outlook to stable from positive. It noted the city's liquidity or access to cash to pay its immediate and short-term debt shifted to adequate from very strong.